| January
2006 Association News |
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ITC
Ruling Favors Wire Rod Importers “We
are frankly shocked and very disappointed that the commission reached
a negative determination given the financial stress that the wire
rod imports from the named countries have caused the domestic industry,”
says Paul Rosenthal, lead trade counsel for the domestic mills.
“I have never been more surprised by a vote in almost 25 years
of appearing before the ITC. The record simply does not support
this conclusion. We will have to review the reasoning in the commission’s
[ruling], but we will strongly recommend that the industry appeal
this determination.” The
domestic petitioners were Connecticut Steel Corp., Gerdau Ameristeel,
Keystone Consolidated Industries, Mittal Steel U.S.A Georgetown
and Rocky Mountain Steel Mills. The
ITC’s preliminary determination comes despite a near doubling
of wire rod imports from the three countries, from approximately
958,000 tons in 2002 to over 1.8 million tons in 2004. The subject
imports from these countries accounted for nearly half of all wire
rod imports during the most recent 12-month period that data are
available (September 2004-August 2005.) The imports have similarly
captured a large and increasing share of the U.S. market over the
last three years, Rosenthal says. Antidumping
petitions against the three countries were filed on Nov. 10, 2005,
and the Commerce Department initiated the investigations on Nov.
30, citing alleged antidumping duty margins of 321.76 percent for
China, 40.25 percent to 81.88 percent for Germany, and 29.23 percent
to 77.76 percent for Turkey. The investigations will now be terminated
pending the results of any appeal. “This
extremely rare no-injury vote by the ITC at the preliminary stage
is a tremendous victory for importers, their suppliers and customers,”
says David Phelps, president of the American Institute for International
Steel. “For this vote to go 6-0 against the domestic industry
suggests that the commissioners believed the cases were frivolous.”
Carbon
steel wire rod is an intermediate product that is ultimately used
for the manufacture of wire and wire products such as coat hangers,
fasteners, wire mesh, tire cord and chain link fencing. Bye,
Bye Byrdie in 2007 The
conference report headed back to the House for final action to resolve
discrepancies between the House and Senate versions that are unrelated
to repeal of the Byrd Amendment. President Bush is expected to sign
the legislation. The
Byrd Amendment distributes antidumping and countervailing duties
collected in each trade remedy case directly to the companies that
petitioned or supported antidumping and countervailing duty actions.
Other Customs duties are distributed to the U.S. Treasury. More
than $1.26 billion in Byrd Amendment payouts have been distributed
since 2001, with more than one-third, or $476 million, going to
a single corporation, The Timken Company, and two of its subsidiaries.
Two-thirds of all Byrd payments went to only three industries, including
bearings, candles and steel. The World Trade Organization ruled in 2002 that the Byrd Amendment violates U.S. trade obligations. Congress’ failure to repeal the law has resulted in WTO-authorized retaliation against U.S. exports by Canada, the European Union, Japan and Mexico on products including baby formula, oysters, wine, dairy products, candy and chewing gum. Total retaliatory tariffs from these countries for 2005 were about $114 million. Bush
Rejects Section 421 Relief In
addition to raising consumer prices, a Section 421 action, which
some claim is a violation of World Trade Organization rules, would
have added to trade tensions, says American Institute for International
Steel President David Phelps. “This
is not the time to create yet another complaint against the U.S.
at the WTO in the midst of the critical Doha Round as it enters
2006, the critical year for negotiations.” The
decision disappointed the American Iron and Steel Institute. “Denial
of relief in the face of an affirmative ITC decision that a surge
in imports from China had resulted in market disruption raises serious
questions about the effectiveness of Section 421 of the Trade Act
of 1974 and the administration’s commitment to enforcing our
trade laws,” stated a release from AISI. The
ITC had issued an affirmative injury vote of 4-2 in October. The
Section 421 petition, which is designed to address imports specifically
from China, was filed by Allied Tube and Conduit Corp., Ipsco Tubulars
Inc., Maruichi American Corp., Maverick Tube Corp., Sharon Tube
Co., Western Tube and Conduit Co., Wheatland Tube Co. and the United
Steelworkers. Inventories
dropped for the 10th straight month, falling 21.5 percent from a
high of 15.9 million tons in January. Steel inventories are 19.2
percent behind November 2004 and down slightly from October’s
12.7 million tons. The
current inventory of 12.5 million tons represents a 2.8-month supply. The
situation was similar in Canada, where steel inventories dropped
below one million tons for the first time in 2005. The November
figure of 986,800 tons was 15.1 percent behind November 2004 and
down 27 percent from its February high of 1,361,500 tons. The 2.6
months of supply also represented the lowest figure of the year. Service
center shipments of steel in the United States were almost 4.5 million
tons, down 4 percent from October but still 3.9 percent ahead of
November 2004. The year-to-date figure of 50.8 million tons remains
1.8 percent behind the same stretch in 2004. In
Canada, shipments totaled 375,000 tons in November, up 3 percent
from October and 4.1 percent above November in 2004. For the year,
Canadian shipments of 3.8 million tons remained 3.3 percent below
the first 11 months of 2004. Aluminum
shipments dropped off in November in the United States. The U.S.
registered 94,000 tons of aluminum shipped, down 7.1 percent from
October though still slightly ahead of November 2004. For the year,
1.1 million tons of aluminum have been shipped, a 6.9 percent increase
over the first 11 months of 2004. Aluminum
inventories also dropped off, moving from 356,200 tons in October
to 350,600 tons in November. The supply of aluminum increased to
3.7 months. In
Canada, aluminum shipments were flat at 9,400 tons. For the year,
the 10,620 tons shipped represent an increase of 3.3 percent over
2004. Aluminum inventory dropped to 31,000 tons, down 4 percent
from October but still 7.8 percent ahead of November 2004. CBSA:
November Shipping Rate Ahead of Last Year; For most of the year, service centers’ shipments of red metals lagged behind those recorded in 2004, but after 11 months the gap has closed somewhat. Copper
shipments year-to-year are up 1.3 percent, and total alloy shipments
are down just 4.7 percent, with total warehouse shipments off less
than 3 percent. Compared to October (which had one additional shipping
day), total shipments for November were off 2.9 percent, although
the average daily shipping rate month-to-month registered a gain
of 2.0 percent. CBSA
members predict shipment increases in all but one key market during
the first six months of 2006. CBSA polled member service center
executives, plus brass mill and metal strip plate suppliers, for
opinions on the outlook for red metals in the New Year. They were
asked to forecast shipments in eight categories: automotive, construction,
defense, electric/electronic, household products, screw machine
houses, stamping houses and telecommunications. Not
surprisingly, the beleaguered automotive industry represented the
only sector where a decrease in shipments was forecast. The surveyed
executives saw a 2.5 percent decrease in the first half of 2006
compared to the second half of 2005, and a 2.1 percent decrease
from the first half of 2005. The
biggest jump was projected for defense, where shipments were projected
to increase 3.5 percent from the second half of 2005 and 2.8 percent
from the first half of the past year. The defense market includes
ordnance. Sizable
jumps from the second six months of 2005 were projected for telecommunications
(2.1 percent), screw machine houses (2.0 percent) and electric/electronics
(1.9 percent). Stamping
houses were projected to increase 1.6 percent from the last six
months of 2005, while 0.6 percent gains were forecast for construction
(including building products) and household products, which include
appliances. AIIS:
Steel Imports Decline The
American Institute for International Steel, which represents importers,
was surprised by the monthly decline. AIIS has been predicting that
imports overall would increase due to strong demand and high prices
in the U.S. market. “The
October data showed what we believed was the beginning of that trend,”
said AIIS President David Phelps. “The preliminary data for
November are therefore out of line with our predictions, and we
believe may be a statistical or reporting anomaly that will correct
itself in coming months.” Strong
macroeconomic conditions in the U.S. (4.3 percent GDP growth in
the third quarter when these imports would have been ordered), along
with high prices and low inventories, suggest that the market for
imported steel remains strong. “The AIIS monthly survey of
importers also has suggested that import arrivals will be increasing,”
Phelps says. “We expect final data for either November or December
to reflect the positives for the U.S. steel market and conditions
for domestic shipments and imports.” Total
steel imports in November 2005 were 2.36 million tons compared to
2.8 million tons in October 2005—a 15.5 percent decrease—and
a 31.2 percent decrease compared to November 2004. According
to year-to-date figures for 11 months of 2005, imports decreased
11.4 percent, or from 32.88 million tons in 2004 to 29.14 million
tons in 2005. The data show that semifinished imports decreased
by 38 percent in November 2005 as compared to November 2004. For
the year-to-date period, semifinished imports decreased from 6.89
million tons in 2004 to 6.18 million tons in 2005, a 10.3 percent
decline. The
downward trend of steel imports is cause for concern among some
steel users. “While some may highlight a growth in imports
from individual countries, such as China, what actually matters
most to steel users is total steel import numbers,” says Precision
Metalforming Association President William E. Gaskin. “We continue
to be concerned about steel availability in the first quarter of
2006 as weather conditions often can have an impact on imports.
Prices for flat-rolled steel in the U.S. remain at levels substantially
higher than elsewhere and low import levels only exacerbate this
situation.” SSINA:
Imports of Specialty Steel U.S.
consumption of stainless steel through the first nine months of
2005 was 1,735,773 tons, down 6 percent from the previous year.
SSINA
offers this breakdown by market segment from January through September
2005 compared to the first nine months of 2004:
Total
specialty steel imports—including stainless steel, alloy tool
steel and electrical steel—hit 670,764 tons year-to-date through
September, an 11 percent increase. U.S. consumption totaled 2,119,318
tons, a 3 percent decrease. In
alloy tool steel: Imports were 91,238 tons, a 36 percent increase;
U.S. consumption and import penetration are not calculable. In
electrical steel: Imports were 66,058 tons, an 8 percent increase;
U.S. consumption was 307,968 tons, a 7 percent increase; import
penetration was unchanged at 21 percent. BRIEFS The Expanded Metals Manufacturers Association held its fall conference at The Wyndham Chicago hotel Oct. 22-24. Items discussed at the Chicago meeting included promoting expanded metals to new security and fencing markets and establishing new EMMA standards for expanded metals. An official ASTM Task Group meeting was held to review, modify and submit changes to the ASTM 1267 specification on expanded metals. |
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